US May Default on Its Debt Half a Month Earlier Than Expected

According to a new analysis by the Bipartisan Policy Center, the US government may default on its debt half a month earlier than expected.

The Washington Post reported that the analysis found that the government will be unable to pay all its bills starting sometime between Feb. 15 and March 1.

The Post also reported that the government hit the $16.4 trillion statutory debt limit on Dec. 31 but the Treasury Department plans to implement “extraordinary measures” in order to delay default for the first two months of 2013.

“Our numbers show that we have less time to solve this problem than many realize,” Steve Bell, Senior Director of Economic Policy at the Bipartisan Policy Center, said in a statement. “It will be difficult for Treasury to get beyond the March 1 date in our judgment.”

One assumption of the Bipartisan Policy Center’s debt-limit deadline is that confusion around end-of-year tax policy could lead to delays in the filing of taxes and refunds. This could taint projections about the nation’s finances.

Another assumption is the pace of economic growth. Faster growth tends to lift tax receipts.

It is expected that an attempt to raise the debt limit will likely be Washington’s next big battle.Republicans are looking to demand deep federal spending cuts while President Obama insists that he will not negotiate this point.

The White House has said that the nation probably will default if Congress does not raise the debt ceiling by the deadline.